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January 5, 2013

Happy New Year

To the Editor: This is to give best wishes and thanks to the writers who week after week provide us with their insights into the financial state of affairs. I particularly want to thank Kopin Tan, who can write about any subject in a very readable style; Gene Epstein for his thoughtful comments about the greater economic picture; Tiernan Ray for his great explanations about what is going on and what is likely to happen in the tech world (although I think he has some explaining to do about Apple); Steven Sears for making the arcane world of options a little less so; and Michael Aneiro for really livening up the Current Yield column. All the best in the new year! Bob Zeumer Venice, Fla.

Hill of Beans

To the Editor: Hindsight shows that the Commodities Corner columns of Dec. 5, 2011, and May 14, 2012, about soybeans were too bearish. Yes, nobody forecast the U.S. drought of 2012, but the big mistake in both was the bearish downgrading of Chinese demand. Maybe the pundits are sandbagged by the noises that come out of China. Rod Derbyshire Menlo Park, Calif.

Signs of the Times

To the Editor: Randall W. Forsyth and some of the market pundits forget some important points when comparing the current situation with the period leading up to the debt-ceiling debacle in the summer of 2011 ("Mayan Mindset on the Potomac," Up & Down Wall Street, Dec. 24), which is why they are surprised at the markets' "complacency."

First and most important are the economic statistics. In the spring and early summer of 2011 the data clearly showed that the U.S. economy was weakening. And while recently they haven't been universally good, most data points have been better than expected.

Second is Europe. In 2011, the market was debating daily whether Greece would default or leave the euro; whether Angela Merkel would support the European Central Bank, etc. The ECB had haphazard leadership, and Mario Draghi didn't become its new head until November 2011. His leadership has led to some stability.

Third is the Federal Reserve's QE2, ended in June 2011, and Operation Twist, which wasn't announced until the end of September 2011, after the summer swoon. This year, seeing the potential hazards of the fiscal cliff, the Fed put in place a very large quantitative-easing program. The Fed's balance sheet was contracting slightly in the summer of 2011; it has been expanding lately, with more to come. Cathy Leow Los Angeles

Bad Precedent

To the Editor: During the Weimar Republic, the German central bank destroyed the people's savings by artificially lowering interest rates.